Ulgener

Prof.Dr.M.Fehmi Ülgener

Since almost a decade the regulation requires strait passages for certain vessels[1] to be done with an escorting tug (“CSA”, father of the notorious “TOF”). The reasoning behind this is that strait passages are containing elevated navigational perils, since the area where a technical malfunction occurs provides almost no manoeuvrable space to the vessel in trouble; therefore an extra hand would be warmly welcome during such moments when the vessel cannot avoid a danger by her own means.

According to the regulations, upon certain payment of fees, CSA provides this “extra hand” service to the vessels by providing a tugboat to escort, i.e. to sail in close proximity of the vessel from the commencement of the strait passage until it finishes and the vessel clears the strait boundaries.

As the tugboat escorting fees are included in the freight/hire rates of the owners calculations, such payment is nothing else but one of the routine expenses of the intended voyage, therefore it is within the comfort zone of the owners… well this is until the vessel needs the extra hand, i.e. the moment the incident for which the escorting tug boat hired occurs and renders her services to the vessel, the owners will leave their comfort zone to an uncharted territory. According CSA this situation constitutes a straightforward “salvage”, as if that tugboat was not hired for avoiding the perils involved in a strait passage.

In summer 2021, during the Bosphorus passage with escort tug, a tanker encountered technical problem and started drifting. The escorting tugboat rushed alongside the vessel and (so to say) gave a short shoulder on her bow, which changed the course of the drifting to open seas. At that time the technical problem was also solved and the tanker got control of her own navigation.

During the time of the class survey onboard the vessel, master has been informed that the vessel has been detained by the Port Authority, upon the request of the CSA due the demand of remuneration for salvage.

Our office has been instructed to represent the master and the owners by the H&M underwriters. Although we tried to convince the CSA that the escort tug has done what it was paid for, but to cut the story short, owners (h&m uw) were forced to put up a bank letter of guarantee amounted almost six million dollars to release the vessel and resume her voyage.

This is an ongoing problem for the strait passages and it is not something rare; our office only involved at least five similar cases before, and we can imagine that there are more cases like this. What made this case different from the others is that underwriters were determined this time to instruct us to run a test case against CSA at the admiralty court on the subject whether a tugboat can claim salvage for her not unexpected and unusual actions which she was already contracted and got paid to perform. We believe that the test case will have an important effect on the future conduct of strait passage for the global shipping community. But in the meantime please bear in mind that according to present regulations and customs, the tugboat for which you paid for can ask a couple of million dollars as a salvage claim!

[1] Article 15 (Implementation Directive For the Regulation Regarding Sea Traffic Scheme in Turkish Straits)

1.Vessels with the following properties shall pass through Istanbul Strait during the daytime.

a. Vessels with a full length of 200 meters and above specified in clause (s) of the first paragraph of Article 2 of this Directive, except for Ro-Ro and container ships.

b.All vessels transiting under tow

c. Vessels subject to additional passage conditions.

d.All vessels with full lengths of 250 meters and above.

e. Deep draft vessels.

2.It is strongly recommended that vessels specified in the first paragraph pass through the Strait under the assistance of a pilot and under the escort of appropriate number and bollard pull as specified in clause (e) of the first paragraph of Article 7 of this Directive.

3.The following issues taken into considerations during the planning for Istanbul Strait passage

a. The passages of Ro-Ro and container ships carrying dangerous goods with an LOA between 150 and 250 meters to effected under pilotage assistance and their passage shall be planned to be at least 6 nautical miles apart from other ships carrying dangerous goods with an LOA of 150 meters and over.

b.The passages of Ro-Ro and container ships carrying dangerous cargoes with an LOA of 250 meters and over will be effected under the assistance of pilots and their passage shall be planned to be at least 8 nautical miles apart of others vessels of 150 mtrs LOA and carrying dangerous cargo .

4.Vessels whose specifications are given below shall pass through Dardanelles Strait during the daytime.

a. Vessels with full lengths of 250 meters and above specified in clause (s) of the first paragraph of Article 2 of this Directive, except for Ro-Ro and container ships,

b.Vessels whose LOA is 200 meters and over specified in sub-paragraphs 1,4 and 6 of sub-clause (s) of the first paragraph of Article 2 of this Directive

c. Vessels with an LOA of 200 meters and over carrying IMDG Code Class 1 cargo,

d.Deep draft vessels.

5.It is strongly recommended that vessels specified in subparagraph (a) of the fourth paragraph carry out the Dardanelles passage with a maritime pilot and tugboats in the number and with the bollard pull specified in clause (e) of the first paragraph of Article 7 of this Directive.

T. Duygu Yazıcı Aracı
Senior Associate Lawyer

Article 17 of the Civil Procedure Code, allows merchants and public legal entities the resolution of disputes between them by authorizing one or more specified courts by means of an agreement. According to the provisions of this article, it is possible for the parties to resolve possible future disputes by filing cases only at the courts thus specified by the agreement. In law these types of agreements are named as “jurisdiction agreements” and are used frequently in situations where one of the parties is a foreigner. Although it is possible to create jurisdiction agreements as separate agreements, in general they are encountered as an article (in other words a jurisdiction clause) in the body of general agreements specifying the legal relationship between the parties.

In order for a jurisdiction agreement to be legally valid, it must be in writing, the legal relationship wherein the dispute occurs must be prespecified or ascertainable and the relevant authorized court(s) must be indicated. More importantly an exclusive jurisdiction rule for the relationship between the parties must not be present in laws. Otherwise the jurisdiction agreement will be invalid.

In maritime law, jurisdiction agreements are frequently encountered in bills of lading. As there is always a charter party between the shipper and the carrier in bulk cargo shipments, the bills of lading used in these instances refer to the charter party executed between the parties on jurisdiction. In container transportation, as the bill of lading is the only document that specifies the legal relationship between the parties, provisions on jurisdiction are usually found amongst the text on the back of the bill of lading.

We have encountered cases in the last few years where the courts have overruled the jurisdiction clauses written on the back of bills of lading. A new implementation we are encountering is, although the jurisdiction clause on the bill of lading specifies foreign courts (or arbitration) as having authority, cases can be filed against foreign shipowners’ agents as their representatives due to the acceptance of the provisions in the Turkish Commercial Code (TCC) that specify the authorities/powers of the agencies as the exclusive jurisdiction rule.

In Accordance with the article 105 of TCC;

“Agencies are authorized to make or accept all types of notices, notifications and protests on behalf of their clients regarding the agreements they mediate or conduct. The agencies may file a case on behalf of their clients in respect of disputes that may arise as a result of these agreements and they can also be defendants to the same on behalf of their clients. All provisions in agreements that is contrary to this rule, relating to agencies that are acting as agents for foreign companies, are invalid.”

According to this provision, the Turkish agent as the representative of the shipowner, becoming a party to cases arising from agreements to which they are intermediaries or are party to as the representatives of their clients, is not a new development. However even in the situations where foreign courts have been deemed to have jurisdiction over disputes arising from the bills of lading, filing a case against the shipowner’s agent as the representative is a new approach. This approach means that article 105 of the TCC referred to above is accepted by the Court of Appeal as exclusive jurisdiction and therefore the jurisdiction clause in the bill of lading is invalid.

Therefore in accordance with the Court of Appeal judgement, although the bill of lading states that foreign courts (or the arbitration) will have the jurisdiction, in situations where a foreign shipowner’s agent in Turkey is an intermediary in the carriage or party to the agreement, the jurisdiction clause will not be valid and the shipper will be able to file the case in Turkey against the shipowner’s agent. Although we have not witnessed it so far, the interpretation of the Court of Appeal about the validity of jurisdiction clauses, in situations, where the agent has executed a charter party on behalf of the shipowner or where it has acted as an intermediate to such charter party may be along the same lines.

Gül Alpay
Associate Lawyer

The Supreme Court Assembly of Civil Chambers put an end to a dispute between The Court of First Instance and 11th Civil Chamber of the Court of Appeal, in a case regarding the compensation of the damage suffered by the claimant due to the cargo being completely lost as a result of the fire on the ship.

Pursuant to Turkish Commercial Code (TCC), the carrier is liable for the loss or damage due to fire only if the fire is caused by his own fault; however, if the fire occurred due to the fact that the seafarers did not take due care to ensure that the ship was seaworthy at the beginning of the voyage, the carrier cannot escape liability.

The carrier can prove the seaworthiness of the ship with the certificates obtained from the classification societies and the inspections made by the independent institutions. Since the certificates and documents presented constitute a prima facie evidence in favour of the carrier, the burden of proof passes to the other party (cargo owner). Accordingly, cargo owner must prove that the ship was not initially seaworthy despite these documents. If the cargo owner proves the unseaworthiness, the burden of proof passes back to the carrier. In such a case, the carrier must prove that it was not possible to discover the unseaworthiness at the beginning of the voyage in order to escape liability.

In the concrete case, the dispute between The Court of First Instance and 11th Civil Chamber of the Court of Appeal is whether the seafarers were inadequate in responding to the fire and whether this incident should be regarded as an unseaworthiness that entails the liability of the carrier.

It was determined in the expert reports that the technical equipment of the ship complied with the legislation and that there was no defect in the machinery and this was accepted by The Court of First Instance. The issue was whether the seafarers were sufficient to respond to the fire or not.

The Court of First Instance decided that the ship was unseaworthy at the beginning of the voyage due to the fact that seafarers could not respond to the fire as needed and were insufficient to activate the necessary equipment. Accordingly, the carrier was held liable.

The defendant (carrier) appealed this decision. 11th Civil Chamber of the Court of Appeal overturned the decision and stated that the certificates and documents which were submitted to the file proved that the seafarers were trained and had sufficient knowledge regarding responding to fire. This created a prima facie evidence in favour of the carrier that the ship was seaworthy, and that the contrary could not be proven by the claimant.

The Court of First Instance did not agree with the decision of 11th Civil Chamber of the Court of Appeal and resisted on the first decision, which held the carrier liable; therefore, the file was sent to The Supreme Court Assembly of Civil Chambers, which is the competent court in case of conflict between the courts.

The Supreme Court Assembly of Civil Chambers decided that a fire of this magnitude is the most dangerous event that can be encountered at sea, and that the seafarers were trained and had knowledge regarding responding to fire according to the certificates which were submitted to the file and the contrary could not be proven by the claimant.

The seafarers’ failure to intervene in the fire was due to purely human emotions that could occur in such an extraordinary situation such as fear of life and panic. The Supreme Court Assembly of Civil Chambers decided that such a situation does not mean an unseaworthiness of the ship at the beginning of the voyage; therefore, the carrier was not held liable.1

1 The Supreme Court Assembly of Civil Chambers decision numbered E. 2019/317, K. 2019/628, dated 30.5.2019

R. Zehra Çolak
Associate Lawyer

With the increase in maritime trade, maritime risks have also increased and the notion of "Insurance" has become a necessary element of commercial life in terms of financing these risks.However, it is certainly difficult for a single insurance company to cover large amounts and the full risk arising from an insurance contract with third parties, so, the notion of “Joint Insurance” and its sub-notion “Closed Co-insurance” have emerged in order to minimize this difficulty by distributing the risk among several insurance companies. Whereas "Slips", which we encounter frequently in international insurance market, in which more than one company undertakes the risk at their own rates and contains the details of risk and insurance cost, is also generally considered within the scope of "Joint Insurance".

Article 1466 of the Turkish Commercial Code, which regulates Joint Insurance; it is clearly stated that if more than one insurance company guarantees the same risk, they are all responsible for the damage at the rate of the insurance costs. The insured risks are insured piecemeal, separately, and independently from each other and each one of the insurers is responsible in proportion to the sum of the insurance costs. However, if mutual liability is determined, the insured cannot ask for more money for the damage they have suffered, as well as each of the insurers is only responsible for up to the price that he is obliged to pay according to the contract. In this case, the right of recourse that the insurer making the payment has against other insurers is in the proportion of the costs that the insurers must pay to the insured in accordance with the provisions of the contract. In both cases, if the insured has a right to bring claim against those responsible for the damage incurred, this right will pass to the insurer as much as the indemnified amount and would become the subrogation of the insurer.

In Closed Co-Insurance, a part of the undertaken risk by the insurance company, in an insurance contract, is transferred to one or more insurance companies through separate contracts (protocol). In a closed co-insurance, there is only one insurer that makes a contract with the insured. However, in respect of the protocols, the insurer shares the risk it has provided against the insurer with other insurance companies (co-insurer/coassurers) in accordance with the agreements they have made. Within this scope, only the insurer, which is a party to the insurance contract, is liable to the beneficiary of the insurance. In this case the Supreme Court has concluded, the addressee of the insured is only the insurer that issues the insurance policy, co-insurers and the insured are not interlocutors to each other both for the payment of the premiums and in the collection of risk compensation. There is no legal relationship between the insured and the co-insurer. As a result of this, the co-insurer company will not be able to become the subrogation of the insured.

In a recent Supreme Court decision dated 2021, when the claim for receivables arising from a collision of an insured ship is evaluated, there is a closed co-insurance protocol between the parties which are the insurance companies and pursuant to this protocol, the claimant insurance company has the right to file a lawsuit against the defendant insurance company within the scope of the principle of relativity of the contract's, however, there is no contractual relationship between the co-insurer and the insured and since the claimant co-insurer company does not carry the title of insurer, they cannot file this lawsuit as a successor of the insured; addressee of the insured is only the insurer that issues the insurance policy, co-insurer and the insured are not interlocutors to each other both in the payment of premiums and in the collection of risk compensation.

In summary, in the situation of a joint insurance, the risks are insured by more than one insurance company at the rate of its shares and in an independent manner. However, for closed co-insurances, there is only one insurer party to the insurance contract, this insurance company then after shares the risk it has provided against the insurer with other insurance companies in accordance with the protocols they have made. As a result of this, in joint insurance, each insurance company becomes the subrogation of the insured in proportion to the amount it indemnifies; on the other hand, for closed co-insurance, the co-insurers cannot be argued to be subrogation because there is no contractual relationship between the insured.

Yağızalp Kırca
Associate Lawyer

As it is known, environmental pollution disputes are common in maritime law and they have two aspects; one is administrative (the pollution fine) and the second is criminal. In this article, we aim to give information on the criminal aspect of the matter.

The crime of polluting the environment is defined in the articles 181 and 182 of the Turkish Criminal Code. As one can imagine, criminal investigations are usually (though there are exceptions as can be seen below) initiated against the seafarers rather than the shipowner himself.

Pollution of the Environment Intentionally (TCC Article 181)

Article 181/1 of the TTC stipulates that “ Any person who intentionally discharges waste or refuse material into the soil, water or air, contrary to the technical procedures as defined in the relevant laws and in such a way as to cause damage to the environment, shall be sentenced to a penalty of imprisonment for a term of six months to two years.”

In the continuation of TCC Article 181, the aggravated versions of the crime are regulated as follows;

TCC Article 181/2: Any person who brings waste or residues into the country without permission shall be sentenced to a penalty of imprisonment for a term of one to three years.

TCC Article 181/3: In case the waste or residues have permanent characteristics in soil, water or air, the penalty to be imposed shall be double that of the penalty according to the above paragraphs.

TCC Article 181/4: Where an offence is committed as defined under paragraphs one and two in relation to waste or residues that has a characteristic which may cause the alteration of the natural characteristics of plants or animals, enhance or create infertility or cause an incurable illness in humans and animals, the offender shall be sentenced to a penalty of imprisonment for a term of not less than five years and a judicial fine of up to thousand days.

TCC Article 181/5: Where the offences regulated under Paragraphs one, three, and four of this article are committed by a legal entity then security measures specific to legal entities shall be imposed.

Pollution Caused by Negligence (TCC Article 182)

TCC Article 182/1: Any person who negligently causes waste or residues to be discharged into the soil, water or air in a way that harms the environment is punished with a judicial fine. If these wastes or residues have a permanent effect on the soil, water or air a penalty of imprisonment shall be sentenced for a term of two months to one year.

TCC Article 182/2: Any person who by negligence causes the alteration of the natural characteristics of plants or animals, enhance or create infertility or cause an incurable illness in humans and animals, the offender shall be sentenced to a penalty of imprisonment for a term of not less than five years a penalty of imprisonment shall be sentenced for a term of one year to five years.

Investigation Phase

The crime of intentionally or negligently polluting the environment is not among the crimes subject to complaint. Withdrawal of the complaint does not result in the dismissal of the criminal investigation or case. Since it is rather difficult for the public prosecutors to be heard of the pollution, it is a common practice to initiate an investigation on complaints from municipalities. The statute of limitations is 8 years for (the basic version of the crimes) intentionally or negligently pollution of the environment.

During the investigation, prosecutors require expert reports and appoint environmental engineers to evaluate the matter. The investigation phase is mostly carried out according to expert reports.

Litigation Phase

Although prison sentences are mentioned in the provisions regulating the crime, there are principles in Turkish Criminal Law that will abolish the penalty of imprisonment if the conditions are met.

The first of these principles is the postponement of the sentence. In cases where the sentence imposed is less than 2 years' imprisonment, the postponement of the sentence is very common in practice. If court decides to postpone the sentence, no criminal sanction applies for a 5 years period and if the perpetrator does not commit a crime deliberately for 5 years, the crime of polluting the environment is deemed to have never been committed. This option is not available for the aggravated versions of the crime since the penalty of imprisonment should be less then 2 years as mentioned above.

The second option, which can be ordered by the court instead of imprisonment, is a judicial fine. Judicial fine is a type of penalty that can be applied alone or together with a penalty of imprisonment for a crime committed. If the imprisonment sentence for the crime of polluting the environment intentionally or negligently does not exceed 1 year, it can be converted into judicial fines.

As a result, it is highly likely that the prison sentence will be postponed or converted into a judicial fine, except in cases where the perpetrator is found guilty for the aggravated versions of the crime.